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- Business and Finance
- Financial Analysts
If you have an interest in numbers and are enthralled with the finance and business worlds, you might consider a career as a financial analyst. Financial analysts work for banks, insurance companies, securities firms and other businesses, making investment recommendations or decisions on behalf of the firm. They usually specialize in either the “buy side” or the “sell side.”
Financial analysts can be divided into two categories: buy side analysts and sell side analysts.
Buy side analysts develop investment strategies for companies that have a lot of money to invest. These companies, called institutional investors, include mutual funds, hedge funds, insurance companies, independent money managers, and nonprofit organizations with large endowments, such as some universities.
Sell side analysts advise financial services sales agents who sell stocks, bonds, and other investments.
The following are examples of types of financial analysts:
Portfolio managers supervise a team of analysts and select the mix of products, industries, and regions for their company’s investment portfolio.
Fund managers work exclusively with hedge funds or mutual funds.
Ratings analysts evaluate the ability of companies or governments to pay their debts, including bonds.
Risk analysts evaluate the risk in investment decisions and determine how to manage unpredictability and limit potential losses.
Role of Financial Analysts
- Evaluate the risk in investment portfolios and help limit potential losses
- Supervise teams of analysts and choose the mix of investments for a company’s portfolio
- Work with spreadsheets and specialized software packages to analyze data and develop forecasts
- Measure risks and make recommendations to buy, sell or hold investments
- Prepare written reports
- Meet with investors to explain recommendations
Academic Qualification of Financial Analyst
At the very basic level, an analyst requires a Bachelor’s degree in Business Administration or Finance although a Master’s degree in these specializations helps a great deal at the entry level.
Skills of Financial Analysts
Analytical skills: Financial analysts must process a range of information in finding profitable investments.
Communication skills: Financial analysts must explain their recommendations to clients in clear language that clients can easily understand.
Decision-making skills: Financial analysts must provide a recommendation to buy, hold, or sell a security. Fund managers must make split-second trading decisions.
Detail oriented: Financial analysts must pay attention to details when reviewing possible investments as small facts may have large implications for the health of an investment.
Math skills: Financial analysts use mathematical skills when estimating the value of financial securities.
Technical skills: Financial analysts must be adept at using software packages to analyze financial data, see trends, create portfolios, and make forecasts.
Financial analysts usually work in an office setting. They may be required to travel to meet with clients or potential investors. A fast-paced work environment is typical, and they may work more than 40 hours per week.
Scope of Financial Analysts in India
Scope of a certified financial analyst is wide and covers various sectors and most prominently, banks, industries, finance markets and technology. A financial analyst can opt for the role of both a financial analyst and an independent financial investment. Some of the common employers are JP Morgan, Bank of America, Citibank and so on They are hired as Financial Analyst, Securities Analyst, Investment Analyst, Equity Research Analyst, Credit Products Officer, Operational Risk Analyst, Planning Analyst, Research Analyst, Real Estate Analyst.
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